Philippine Peso Rises for Second Day on U.S. Data; Bonds Gain

The Philippine peso advanced for a second day after better-than-forecast U.S. housing starts eased concern global growth is faltering. Bonds gained.

The MSCI Asia-Pacific Index (MXAP) of shares climbed the most in three weeks after U.S. builders broke ground in November on more houses than at any time in the past 19 months. Starts increased 9 percent to a 685,000 annual rate, exceeding the highest estimate of economists surveyed by Bloomberg News, official data showed yesterday. The U.S. is the second-biggest destination for Philippine exports.

“We’re seeing U.S. developments supporting risk appetite,” said Lito Biacora, senior vice president and head of private banking at Bank of the Philippine Islands in Manila. “The market is still cautious because of the European credit situation.”

The peso rose 0.5 percent to 43.645 per dollar at the close in Manila, according to Tullett Prebon Plc. The currency reached 44.323 on Dec. 15, the weakest level since Jan. 31. It advanced 0.4 percent this year.

Foreign investors bought $391 million more Philippine stocks than they sold in the first three days of this week, exchange data show.

The yield on the Philippine government’s 5.75 percent bonds due November 2021 dropped 15 basis points, or 0.15 percentage point, to 5.394 percent, according to noon fixing prices from Philippine Dealing & Exchange Corp. That’s the lowest level for a benchmark 10-year note since at least 1998, according to data compiled by Bloomberg.

The nation’s 11-month budget deficit reached 96 billion pesos ($2.2 billion), compared with 269.8 billion pesos a year earlier, the government said today.

The Philippines is likely to sell dollar-denominated bonds, Treasurer Roberto Tan said yesterday. The government has received central bank approval to sell as much as $1.5 billion of debt and may offer 25-year securities, he said.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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